That is a weep hole, which tells you if your oil seal (or coolant seal)) in the pump is leaking.
Thanks - I had no idea that it was a weep hole and had never even heard of a weep hole.
Ive done a bit of research on this and other forums and have come up with 3 options
1. fork out for a new or reconditioned pump (by far the most costly option)
2. risk buying secondhand pump of unknown mileage and internal condition
3. providing my impellor shaft is not pitted fit a replacement seal/o ring kit in existing pump
I will probably go for option 3 first.